Mediclaim Policies: cheap, not necessarily the BEST!

Confused about which mediclaim policy is the cheapest or best for you, evaluate your policy on various parameters and save yourself from making a wrong choice based purely on price.

Harsh Roongta

08 Apr 2009

Healthcare
costs for hospitalization in India have risen sharply in the recent
years in tandem with global trends. Many families have seen
their financial planning going haywire due to unexpected costs
incurred on hospitalization of a family member. However, the good
news is that now there is a far bigger consciousness about medical
insurance.

Still
people are stuck with one basic question particularly the first time
buyers - Which is the cheapest mediclaim
policy? But this should not be the only concern, you have to evaluate
your policy on various other parameters as well and save yourself
from making a wrong choice based purely on price.

Say,
if you have diabetes, wouldn't you (all other things being the
same) buy a Mediclaim policy that may be a little more expensive?
But which will immediately cover the hospitalization expenses arising
from complications connected with this disease (heart problems,
kidney or eye problems associated with diabetes) without considering
them as complications arising from pre-existing disease. Or would you
go in for a comparatively cheaper policy which treats all such
diseases as pre-existing and hence not immediately coverable. Spot
the difference!

Pre-existing
disease is probably the most important
parameter, which is relevant because if a disease is treated as
pre-existing then the policy normally provides no coverage or very
restricted coverage for expenditure incurred due to that disease in
the immediate future.

Pre-existing
disease coverage, a broad parameter,
which encompasses the following:

The
Definition: Most policies provide
that any disease that was present at any time in the past
(including any disease, which the insured person may not have been
aware of) is treated as pre-existing. But some have a narrower
definition which may extend to only diseases for which the insured
person had sought consultation for or was treated for or he was
aware of during say the last 4 years. (Narrower the definition, the
better it is for consumers).

The
cooling off period: This is the
stipulated period earmarked by the company, which denotes that
after how many years of continuous coverage the pre-existing
disease will get covered. This is important as after the expiry of
the cooling off period even pre-existing diseases get covered. A
fine point is to find out if the company you are considering allows
your track-record of continuous coverage from another insurance
company for the purpose of calculating this cooling off period or
insists only on continuous coverage with itself for this purpose.

Special
dispensation for diabetes/hypertension:
Diabetes and hypertension, have acquired epidemic status in India.
A host of illnesses/diseases such as heart disease, kidney failure,
paralysis, stroke, eye problems can trace their root cause to
either diabetes or hypertension or both. Since the definition of
pre-existing illness includes any complications arising there from,
this has been a major reason for disputes between the Mediclaim
providers and the consumers in the past. Hence, any policy that
provides a special dispensation for the complication arising out of
diabetes/ hypertension is relevant for a person suffering from
either.

Other
vital parameters:

Sub-
limits: Herethe overall coverage is broken down
into the maximum payable for a particular kind of expense. For e.g.
A few insurance companies now provide that room rent cannot exceed
1% of the covered amount or
that doctors/consultants fees cannot exceed 20 or 25% of the covered
amount.

Co-Pay
requirements: Quite a few companies
now require that the insured bear a certain percentage of the
eligible expenses either unconditionally or under certain
conditions. Some companies provide a discount in premium if you
agree to co-pay. Others might want a co-pay if you choose to get
treated in a non network hospital or others may have a co-pay for
choosing a single air conditioned room or for getting treated in a
hospital in a higher cost city. The co-pay feature is built in to
ensure that the insured chooses the appropriate hospital/room/doctor
levelrelevant
to his economic statusand
also watches the reasonableness of the charges levied by the
hospital to ensure that there is no overspend or overcharge just
because of the existence of the mediclaim policy.

Specific
exclusions: Almost all policies have
general exclusions such as costs incurred for Aids/Sexually
transmitted diseases or congenital diseases, etc. Watch out for
exclusions if it affects you.

Maximum
coverage amount: This is important, as
a particular policy that suits you may not be available for coverage
that you seek.

Maximum
age at entry: Particularly relevant
for senior citizens as quite a few policies may not be available to
them.

Renewability
upto what age : Relevant for senior
citizens as well as people in their 50s since they need to be able
to enjoy the benefit of their track record.

A
summary of parameters is given in the table
below:

Parameter

Relevant
for

Definition
of Pre-existing disease

Consumers
having pre-existing diseases

Cooling
off period for pre-existing disease coverage

Consumers
having pre-existing diseases

Special
dispensation for diabetes/ hypertension

Consumers
suffering from diabetes/ hypertension

Sub-limits

All
consumers

Co-pay
requirements

All
consumers

Specific
Exclusions

All
consumers

Maximum
Coverage amount

More
relevant for senior citizens

Maximum
age at entry

More
relevant for senior citizens

Renewability
upto what age

More
relevant for senior citizens

Go
ahead, evaluate your policy on these broad
parameters, and make the wise decision.

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